• Even in countries with little public involvement in other areas, public funding of education is a social priority, accounting for 13.3% of total public expenditure on average in OECD countries.
• Public funding of primary, secondary and post-secondary, non-tertiary education is, on average, about three times that of tertiary education in OECD countries.
• Between 1995 and 2006, education accounted for a growing share of total public expenditure in most countries.

Significance

Public spending on education, as a percentage of total public spending, indicates the value placed on education relative to that of other areas of public spending, such as health care, social security and national security. Since the second half of the 1990s, most OECD countries have sought to consolidate public budgets, and education has had to compete with a wide range of other areas for public financial support. This spread evaluates the change in spending on education both in absolute terms and relative to changes in the size of public budgets.

Findings

On average, OECD countries devoted 13.3% of total public expenditures to education in 2006, with levels ranging from 10% or below in Germany, Italy and Japan, to 22% in Mexico.

Even in countries with relatively low rates of public spending, education is considered a priority. For example, the share of public spending devoted to education in Korea, Mexico, and the Slovak Republic is among the highest of OECD countries, yet total public spending accounts for a relatively low proportion of GDP in these countries.

On average in OECD countries, public funding of primary, secondary and post-secondary non-tertiary education is nearly three times that of tertiary education, mainly due to near universal enrolment rates below tertiary education, but also because the private share tends to be greater at the tertiary level. This ratio varies from less than double in Canada, Finland and Norway to five times in Korea. The latter figure is indicative of the relatively high proportion of private funds going to tertiary education in Korea.

Trends

Although budget consolidation puts pressure on education along with every other service, from 1995 to 2006 public expenditure on education typically grew faster than total public spending and as fast as national income. The main increase in public expenditure on education relative to total public spending took place from 1995 to 2000; between 2000 and 2006, public expenditure on education and on other public sectors increased in the same proportions.

Over this period the proportion of public budgets spent on education in OECD countries rose from 12.0% to 13.3%. The figures suggest that the greatest relative increases in the share of public expenditure on education during this period took place in Denmark, increasing from 12.2 to 15.6%; Ireland (12.2 to 14.4%), the Netherlands (9.1 to 12.0%), New Zealand (16.5 to 18.9%), the Slovak Republic (14.1 to 19.5%) and the United States (12.6 to 14.8%).

Definitions

Data refer to the financial year 2006 and are based on the UOE data collection on education statistics administered by the OECD in 2008. Public expenditure on education includes expenditure by all public entities, including ministries other than the ministry of education, local and regional governments and other public agencies.